At the "Thirteenth International Conference on Oils and Oils" held in Guangzhou on November 14, Wang Xiaohui, deputy director of the National Cereals and Oils Information Center, said that with the development and continuation of trade friction between China and the United States, the global soybean price level has been greatly affected. The future trade pattern and soybean trade pattern of China, the United States and the world will be a process of rebuilding balance and rebuilding the equilibrium point of prices. In this regard, the market does not need to worry too much, because the soybean market rebuilds the balance of supply and demand and rebuilds the equilibrium value is the consensus of all parties in the market. In the future, the market needs to anticipate current difficulties and risks and be prepared to adapt to the development and changes of the market.

In a speech entitled "Several Issues in the Domestic Oil and Oilseeds Market", Wang Xiaohui said that first, the fundamental pattern of China's domestic food supply exceeding demand has not changed. Taking the corn market as an example, China's corn spot transaction volume has broken through this year. The 100 million tons mark, the actual market supply and demand are booming, but in fact 50 million tons of these transactions have entered the national reserve system, that is, included in the country's 2018/2019 annual corn inventory, and did not actually enter the market Therefore, the high volume of corn production is not the real market demand. The corn market is still in a situation of oversupply of destocking. Second, the central government’s policy of attaching importance to food production has not changed. This year, China has carried out major reforms to the national institutions. From an institutional perspective, the state’s emphasis on grain production, circulation, trade, and reserves has been strengthening, rather than weakening; third, the policy of promoting reform and opening up and using the two markets has not changed. General Secretary Xi Jinping held the " The “First China International Import Expo” made it clear that China’s door to opening up will only open wider! It will not close. In addition, China also needs more soybeans and more fats to improve the living standards of the people, so China will continue to promote reform and opening up; fourth, China's position of firmly safeguarding national dignity and core interests will not change. Since April this year, The Sino-U.S. trade conflict continues to develop, and China and the U.S. have continuously resolved their trade frictions and clarified their views and positions. In this regard, China’s position has not changed.

For the oil and oil market, Wang Xiaohui believes that changes in the international environment are both challenges and opportunities. From 2003 to 2005, China's soybean industry was faced with the price trend of soybeans in the international market, and many companies disappeared from market price fluctuations. At the same time, China's soybean industry also learned to use the futures market to achieve risk management through the sharp fluctuations in soybean prices. Soybean meal, soybean oil, palm oil and other varieties have also been listed on the Chinese futures market, providing risk management tools for domestic industries. The global economic and financial crisis broke out in 2008, but China’s soybean crushing industry has withstood the impact of market prices and realized price risk management through the futures market. Domestic soybean crushing companies such as Jiu San Group have reached 12 million tons of crushing capacity per year, and have grown into The leading enterprise in my country's oil and oil industry. In 2018, Sino-US trade frictions appeared, and the global economic turmoil continued to develop. On August 11, Mr. Han Jun, Deputy Director of the Central Agricultural Office and Deputy Minister of Agriculture and Rural Affairs, emphasized that my country will be open, willing to open up, and capable of responding to changes. Among them, it mentioned that one is to expand imports; the other is to adjust the habit of using grain in the Chinese market; the third is to increase the import volume of fats and oils; and the fourth is to improve my country's domestic soybean support policy. Therefore, my country’s soybean industry has made countermeasures and prepared for the crisis from all aspects. The market has already given price repricing and positioning. In the future, the soybean market will rebuild the balance of supply and demand, and it has become the consensus of all parties in the market. . In the future, the market needs to anticipate current difficulties and risks and be prepared to adapt to the development and changes of the market.

The following is the speech record:

Wang Xiaohui: I am as excited as ever for the platform of Dalian Commodity Exchange. Two months ago, a grand conference on the corn market was held at the Shangri-La Hotel in Dalian. At the meeting, many and very exciting researches and judgments were made on the current and future domestic and international corn situation. Here this year, we held a seminar on oils and fats, which is also a grand event in our industry. So I can participate in this event, I feel very honored. But I also want to say sorry to everyone here. I started working in the information center in 1997 and engaged in market research. I spent more time on corn, and did research on corn, soybeans, wheat, rice, oil and oil. The two varieties of corn and soybeans are I pay the most attention to it, but compared with all the entrepreneurs and industry experts present, I want to put more of a learner's position.

Minister Xingqing just explained to you the current China's food security strategy and key issues for the grain and oil industry. I want to talk more about my superficial feelings about the general environment that affects our domestic soybean oils and oils and other commodities. At the Corn Conference of the Dalian Commodity Exchange in September, when I gave a speech, the first topic I talked about was the basic form of the current domestic food oversupply or focusing on the key category of corn. The oversupply of corn has not changed. , Is still an oversupply, or is still a serious oversupply, but what has changed? What has changed is the mentality of the market.

1. The basic situation of domestic food supply exceeding demand has not changed

Especially in April this year, Sino-U.S. trade frictions appeared, and this friction was not effectively resolved as in the initial market. The expectation of this kind of market transaction and the expectation of China’s grain trade have intensified. At this meeting, I still want to start with this topic. I still want to tell you that despite the presence of many uncertain and unfavorable factors, including Sino-US trade frictions. However, the basic situation of domestic oversupply has not changed. What has changed is still our trading mentality.

We can find some examples to prove why we say that the situation of oversupply has not changed? Take corn, for example. We see that China’s corn trade has exceeded 100 million tons this year. At the beginning of this year, some people predicted that it would reach such a level, but more people believed that it would not reach such a level. After reaching it, everyone will immediately interpret it as such a large trading volume. It must mean that there is a gap similar to it, but we need to keep emphasizing that trading volume does not equal the gap between supply and demand.

According to our calculations, nearly 50 million or more finished grains have entered the new year. After 2018 and 2019, the amount of finished grains entering the carryover inventory will far exceed the previous year. We media is very developed now. In my office, many very young analysts showed me their mobile phones and told me the director. You see, Douyin and Kuaishou are reporting that corn prices are skyrocketing and will rise again. Not now High point, high point next year. Such collective propaganda will seriously distort our supply-demand relationship and prices for farmers’ grain sales and collective concern.

Looking at our wheat again, this year's attention to the reduction in wheat production is also very, very high. Many organizations use the five-day acquisition schedule regularly released by the State Bureau of Grain and Material Reserves as a basis for research and development. At the same time, it is estimated that the amount of grain production will be reduced based on the year-on-year decrease of 20 million tons of net purchases. How much is the reduction in wheat production this year? 15 million tons or 20 million tons? I have said on many occasions that supply and demand determine prices, and this basic law will not change. If you want to see, will our wheat production be reduced because of this? Or even a drastic reduction in production as predicted by some institutions? You look at its price performance. If there is such a drastic reduction in production, will the price of our wheat still maintain the current stable level?

There is also the destocking of our rice, rice, wheat, and corn. These varieties must gradually follow this path. After corn has been destocked for two consecutive years this year, the pressure has been reduced. But our stock of rice is still very, very large. Therefore, we say that the basic situation of domestic oversupply has not changed. But what has changed is our mentality. What we are trading now is not the actual situation of supply and demand, but an expectation, even an anxious expectation.

2. The central government’s policy of attaching importance to food production has not changed

To give the simplest example, this year the central government has carried out a major reform of the organization. The State Grain Administration, which is my unit, after the completion of the reform of the new organization, the State Grain and Material Reserve Bureau was newly established. I often use one sentence I'm joking about our current changes. Now basically, the varieties that the Bureau of Grain and Material Reserves are concerned about include all the varieties in the futures market, such as grain and cotton, oil sugar, crude oil, precious metals, etc., so we can see from this point that we are concerned about the production, circulation, and The importance of trade and reserves is increasing, not weakening.

3. The policy of promoting reform and opening up and using the two markets has not changed

Not long ago, the world's first import-themed trade fair was held in Shanghai. General Secretary Xi Jinping delivered an important speech at the conference, which was also a passionate speech. There is a sentence in it, which is widely quoted in the media, very emotional, saying: "The sea is still there, China will always be here, and the door to China will only open wider and wider! It will not close." At the meeting, once again swear to the world, China's position of reform and opening up. Minister Ye also talked about China's grain issues in his speech just now, China's grain supply, demand, and imports. This year is also the commemoration year of China’s 40 years of reform and opening up. Various activities are being launched one after another. China needs soybeans and we need to import soybeans. We welcome those countries in the world that are willing to provide soybeans to China. Our door is open. . China's efforts to promote a higher level of opening up will not stagnate, nor will China's perspective on advancing the construction of an open market economy.

4. China's position of firmly safeguarding its national dignity and core interests will not change since the Sino-US trade conflict in April this year, China and the United States have continuously clarified their views and positions on how to resolve trade frictions. In this regard, China's position has been implemented and has not changed. In contrast, the other side's position and views have been continuously adjusted. Some time ago, I discussed the market with the CEOs of several companies. Everyone said helplessly, saying that now we don’t have to look at the fundamentals anymore. We are now focusing on Twitter, and our fundamentals will come out after Twitter is posted. We are not as good as studying the fundamentals as we study Twitter, which is very humorous and helpless, but also very realistic. In August of this year, we released a white paper on the facts of Sino-US trade frictions and China’s position, and once again announced to the world our position on this issue. The door will always be open, but our core interests cannot be given up.

The second part, international environmental changes are both challenges and opportunities

This year is a year in which China's soybean market has faced important challenges in the past few decades. But when we analyze this difficulty, we must not forget that China’s development history and the history of China’s economic growth in the past 40 years of reforms have never lacked difficulties and challenges. Difficulties and challenges are development and opportunities when used well. We can count them. In the past few decades, the challenges and challenges we have dealt with have brought us development and opportunities. I just told you that I joined the work in 1997 and went to the National Grain and Oil Information Center. In the first month of my work at the National Grain and Oil Information Center, one of my retired old leaders recommended me a book called "Who will feed the American scholar Lester Brown" published in the "World Watch" magazine China? In the article, the author believes that, on the one hand, as China’s population increases and consumption structure changes, on the other hand, as China’s urbanization and industrialization advance, China’s food supply will be reduced by 20% in 2030 compared to 1994. China will face a huge food shortage. At that time, China will not be able to feed itself and will improve its quality of life year by year. In addition to consuming domestic food, China’s population will have to import large quantities in the future to meet China’s consumption. But the world cannot provide China's import demand, and China will cause food shortages in the world.

Well, after this issue was raised, there was an uproar in the international public opinion, but our government seized this challenge and made good use of this opportunity. In Minister Ye’s speech just now, it was mentioned that in 1996 we published the "China's Food Issue". The white paper, after 1996, China's grain output has entered a rapid growth channel. In 1998, our grain production exceeded 500 million tons in advance.

During the 1997 drought and flood, China’s grain output exceeded 500 million tons. That was a memorable period. What should we do if we start to have more grain in the future? We began to return farmland to forests, grassland, and lakes, and we began to adjust prices. This lasted until 2003. In 2003, there was an incident that changed the pattern of soybeans in China. Some of the older people in this room experienced the incident firsthand. Young comrades can search for that incident through Baidu, which is what we usually describe as the soybean turmoil. From August 2003 to the first quarter of 2014, in just a few months, the price of soybeans in the United States rose from 540 cents to more than 1,000 cents, and the cost of soybean purchase prices in China rose from RMB 2,300 to more than 4,000. . The front rose rapidly, and the back fell sharply. In that soybean storm, many of our private enterprises were seriously injured. That lesson taught us how to face risks? More of our companies have begun to enter the futures market and begin to use futures as a tool to avoid risks. I clearly remember that before the turmoil, there was a private entrepreneur who was processing soybeans. He told me that you look at my factory. It was designed and built, and the investment was recovered in the same year. Later, this enterprise disappeared in the soybean storm. Why did it disappear? Because the capital chain broke, why did it break? Because there is no hedging of futures. So we encountered the soybean turmoil in 2003, but we also began to seize the opportunity for development. We began to widely use futures risk aversion tools.

Now, no oil processing company says that I don’t look at the futures market, and I don’t participate in futures hedging. If so, don’t do any business with him. Therefore, we say that the risks and challenges of this time have brought us a great development in China's oil industry. Also, what we need to talk about is that in 2007 and 2008, before the financial crisis, we had another challenge and also an opportunity. During the period from 2003 to 2008, China's economy and the world's economy grew rapidly, and the supply of soybeans was also facing tight during that period. At that time, the country conducted a grease auction and used the way of putting grease to guide the oil price in the market. Assuming 300,000 tons and 500,000 tons were taken out, it was like a wave entering the sea without seeing any response. At that moment, we began to realize that we need to strengthen the processing capacity of our domestic enterprises. In 2008, the National Development and Reform Commission drafted and issued guidelines for the healthy development of the soybean processing industry. Dalian Commodity Exchange also participated in the work of this research. After 2008, what kind of situation do we see? What I saw is that a large number of domestic-funded oil and fat processing enterprises have grown and become stronger. In this market, the right to speak and dominate is established.